As Target sharply downsizes in Minnesota, it is expanding its corporate footprint in Silicon Valley and New York.

The restructuring will be concentrated at Target’s corporate locations and focus on driving leaner, more efficient capabilities — removing complexity and allowing the organization to move with greater speed and agility.

New Target CEO Brian Cornell has found the corporate culture in Minneapolis too plodding and cautious. Cutting complexity at the corporate level will make Target more competitive. Retail specialist Dave Brennan at the University of St. Thomas sees a real cultural change underway. Cornell’s background includes experience at Sam’s Club and he is operating with the same kind of dispatch as the Walmart organization.

(The Walmart culture is typically more action-oriented — they analyze opportunities comprehensively, but faster than Target.)

Target intends to make large investments in mobile and digital technologies. It has already made some large strides in those areas, but it needs to do more. Because omni-channel customers are so profitable, Target needs to be ready as U.S. consumers become more tech-savvy. Digitally-connected shoppers who interact on more than one channel generate three times the sales and two-and-a-half times the margin as customers who shop only in the store.

Target is one of many retailers and manufacturers, including Best Buy, that have recently opened innovation centers on the tech-heavy West Coast.

The premise around “field structures of attention”: We can’t solve level 4 problems with level 1-3 mechanisms. Consistent with general theory of complex adaptive systems.

(Also consistent with Gödel’s incompleteness theorems of mathematical logic translated to complex systems / computer architecture: A computer of a given size can model only a smaller computer — it cannot model itself. If it modeled a computer of its own size and complexity, the model would fill it entirely and it wouldn’t have any resources available to exercise the model. A corollary — we may never fully understand the human brain by using the human brain to understand it.)

– More than 40% of American workers classified themselves as a “free agent” in 2012

– The trend is driven by both necessity and possibility

– The shift is clear in industries like software development and construction

– The baseline level of skills required in traditional organizations is increasing — in some ways, those skills that are needed as an entrepreneur: Self-motivation, problem-solving, critical thinking, teamwork

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Three stages of development / evolution:

1) Monolithic / traditional structure (largely historical)

2) The rise of a more granular (agile / flexible) structure as a significant component of economic activity (free-agent, contract / temporary work — the current trend — trending even further toward hyper-granularity)

3) Integration / optimization of the more granular component with the more monolithic component (the next generation of industrial organization)

(For more background on organizations as brains / organizations as organisms, see the classic works “Images of Organization” by Gareth Morgan and “The Well-Being of Organizations” by West Churchman.)

Although granularity is on the rise, monolithic-type organizations will persist (largely for more operational / scale-based / repetitive activities). Insofar as monolithic-type organizations persist, they will nevertheless migrate toward internal structures that emulate granular-type organizations — by ‘decomposing’ their breadth of scope into smaller / more agile components and effectively integrating those components into larger super-structures (including super-structures that form beyond the organization’s natural boundaries).

While the network organization is only in its practical infancy, the discipline of software engineering has shown significant maturity in applying the principles of decomposition / integration. The immense demands on software systems that are vast in scope / complexity and robust in the face of incessant change has forced software engineering to produce radically new architectural and developmental paradigms — just as the emerging workplace realities will stimulate radically new organizational paradigms.

Although software systems are not human / organizational systems, the two contexts share some common characteristics, and advances in software engineering (object orientation, client-server architecture, agile development) can provide some symbols, models, and templates for the organizational challenges that lie ahead.

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